IRVINE, Calif., and MARKHAM, Ontario — Irvine-based Sabra Health Care REIT Inc. (NASDAQ: SBRA) has partnered with Markham-based Sienna Senior Living (TSX: SIA) to acquire a Canadian seniors housing portfolio for $243 million (CA$307.5 million).
The portfolio includes 11 communities totaling 1,048 units across the provinces of Ontario and Saskatchewan. Sabra and Sienna will co-own the properties through a newly formed 50/50 joint venture.
The predominantly independent living portfolio consists of mostly newer construction with an average age of six years, which positions it well to capture demand growth across the seniors housing industry as Canada’s 75-plus population is expected to double over the next 20 years.
“We have had a longstanding relationship with the Sienna team, and after evaluating several investments over the years we are pleased to deepen our strategic relationship through the pending acquisition of a high-quality seniors housing portfolio with substantial scale,” says Talya Nevo-Hacohen, CIO of Sabra. “The combination of Sabra and Sienna’s asset management and operating skillsets allow us the opportunity to improve performance and create value with this attractive portfolio.”
The price equates to $230,000 per unit, which is below replacement cost and attractive amid a backdrop of escalating construction costs, according to Sabra. Average occupancy for the stabilized properties is approximately 90 percent.
The portfolio also has embedded incremental value-creation potential through expansion opportunities for an additional 233 units.
The transaction is expected to close upon receipt of regulatory approvals, which is anticipated to occur in the first half of 2022.